Canners wait in line at One Planet Recycling in San Francisco.
Photograph: Julia Carrie Wong for the Guardian

Mr Wong was fourth in line to pay his bus fare when the driver spotted the black garbage bag he was carrying.

“Off! Off!” the driver shouted. “Nobody wants to smell your cans.”

The middle-aged man, who did not want to give his first name, complied. He stepped back onto the sidewalk near San Francisco’s Civic Center.

When the next bus arrived, he sneaked on through the rear door.

The streets in California may not be paved with gold, but the trash cans that line them are full of money. Industrious scavengers can redeem aluminum cans, plastic containers, and glass bottles for hard cash (5 or 10 cents apiece), thanks to the state’s 30-year-old container deposit program.

Canners are a common sight in the city with one of the highest rates of inequality in the country. Elderly Chinese men and women sort through trash cans in downtown San Francisco, wearing aprons, gloves, and protective sleeves to keep their arms clean, pulling neatly sorted carts behind them.

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“This is my job,” said Carlos Peraza, a homeless man who had walked to One Planet Recycling center with a shopping cart full of bottles, the same center in San Francisco’s south-east corner where Mr Wong was going. “I never go to shelters. I never go the hospital. I survive by myself.”

“It is sufficient,” said Sergio Deviante, a homeless man who lives under the highway overpass near the recycling center. He said that he declines government assistance, preferring to survive on the $40-$50 he can make each day collecting containers.

“I live good,” he said. “I buy my cigarettes. I buy what I need.”

But the income that many Californians rely on from canning is imperiled by a crisis for recycling centers.

Over the past 18 months, hundreds of recycling centers in California have closed – about 20% of the total – reducing the ability of people across the state to access their refunds. The greatest blow came on 31 January, when a single company announced the closure of 191 centers across the state.

And Deviante’s local center could very well be next.

“It’s not guaranteed we’re going to be here next year,” said Ors Csaszar, the owner of Our Planet Recycling. “The future is really, really dark.”

Ors Csaszar, of One Planet Recycling, poses with the bus he uses to ferry recyclers from San Francisco’s Chinatown. Photograph: Julia Carrie Wong for the Guardian

For the average consumer, recycling can seem as simple and as virtuous as dropping the correct items into the correctly colored bins. But the actual process of recycling massive amounts of material – Californians recycled more than 18bn beverage containers in 2015 – is reliant on global commodities prices, the energy market, and government subsidies.

Recycling centers, which are privately run, buy beverage containers from individuals for the state-guaranteed redemption value, then sell the materials to processors. (Companies that pick up curbside recycling also sell the materials to processors, and pocket the redemption value themselves.)

“The nickel or dime [redemption value] is basically a wash. No one is making money on that,” explained Mark Oldfield of CalRecycle, the state agency that oversees the program. “The money is made on the scrap value of those materials.”

The problem is, he said, the market for those materials has just gone “down, down, down”, plummeting around 40-50% over the past three years.

Recycled materials compete for buyers with “virgin” materials, and when those “virgin” materials are cheap, the bottom drops out of the market.

“Energy is so cheap right now that it’s much easier for manufacturers of anything –aluminum cans or plastic bottles – to be using virgin material instead of recycled material,” said Mark Murray of Californians Against Waste.

The scrap value of glass and plastic has never made up for the operating costs of collecting it, so the state has provided subsidies (in the form of processing payments) in exchange for requiring the centers to accept those materials alongside the more lucrative aluminum cans.

But plastic bottles are overtaking aluminum cans as the dominant beverage container, according to Murray.

“Instead of being dependent for their revenue on the market scrap price of aluminum, they’re increasingly dependent on payment from state,” Murray said, and the state subsidies are not keeping up with the cost of operating.

“That’s terrible news for the environment,” Murray said.

The state’s overall recycling rate fell below 50% in 2015 for the first time since 2010, a setback that Californians Against Waste links in part to the loss of recycling centers.

Another pressure facing urban recycling centers is the distaste of neighbors for the people who rely on them.

Our Planet Recycling is located on Bayshore Boulevard in the south-east corner of the city, a stretch of divided highway where San Francisco keeps the kind of businesses it likes to pretend it doesn’t need: fast food restaurants, big box retailers, auto repair shops.

In 1990, San Francisco had 35 recycling centers scattered through its many neighborhoods. Today, there are only eight left, and they are all concentrated in the south-east corner of the city.

“So many new people come in, the property values go up, and they say, ‘I don’t want to see these people,’” said Csaszar, gesturing toward his customers.

Csaszar runs his own shuttle – a repurposed school bus – in the mornings to ferry recyclers from Chinatown to his center, but during the day, canners without cars are stuck trying to sneak past unfriendly public bus drivers, or making the trek on foot.

Kicking out recycling centers is an effective way for affluent residents to ensure they don’t have see certain people.

Deviante said he used to sleep on the streets near a recycling center in one of San Francisco’s more central neighborhoods.

When the recycling center left the neighborhood, so did he.

Antonio, an immigrant from Lebanon who asked not to be identified by his last name, expressed frustration with the city’s hostility toward recyclers.

“I’m low income,” he said as he emptied a beat-up station wagon of the recycling he collects from his job as a janitor.

“When they take this away from me, I’m going to have to go on welfare.”